The Federal Reserve Bank of Philadelphia announced that credit card performance metrics are showing signs of “consumer distress.” The percentage of accounts 90 days past due and the share making only minimum payments have reached 12-year highs. Both 30- and 60-day past due account percentages have also increased, though not to record levels. Large banks expect credit card performance to stay at current levels throughout 2025.
However, the share of accounts making minimum payments has peaked over the past two quarters, signaling growing financial stress among consumers. This trend is supported by a new high for revolving credit card balances. Credit card balances rose 4% in the fourth quarter compared to the previous year.
Consumer credit distress indicators climbing
This marks a slowdown from the double-digit growth in 2022 and 2023. A February report noted that issuer earnings indicated consumers were struggling to make timely credit card payments.
Research late last year showed 75% of the population carries credit card debt, with a higher percentage among those living paycheck to paycheck. The New York Federal Reserve reported consumers accumulated an additional $45 billion in credit card balances during Q4 2024, bringing the total to $1.2 trillion by December. Delinquency rates were “elevated.”
Automotive repossessions in 2024 surged to a 15-year high, with around 1.73 million vehicles seized by lenders—a 16% rise from the previous year.
These metrics collectively show American consumers are having increasing difficulty managing their debt, reflecting broader economic pressures and financial instability.
